Comments on: Final 4th Quarter GDP Growth Comes in at 2.5%; It’s Past Time to Address the Obstacles to Higher Growth http://www.bizzyblog.com/2007/03/29/final-4th-quarter-gdp-comes-in-at-____/ The Business End of the Blogosphere Mon, 13 Oct 2008 12:51:23 +0000 http://wordpress.org/?v=2.5 By: Ironman http://www.bizzyblog.com/2007/03/29/final-4th-quarter-gdp-comes-in-at-____/#comment-112717 Ironman Fri, 30 Mar 2007 04:55:33 +0000 http://www.bizzyblog.com/2007/03/30/final-4th-quarter-gdp-comes-in-at-____/#comment-112717 #2, Skeptical is good. For what it's worth, I have confidence in the modified approach. By itself, the climbing limo method would self-correct as new information (GDP data) is recorded, but may be considerably off target from forecast to actual values until the source data used to make the forecast fully incorporates changes in economic conditions. The challenge for me is more about how to integrate newer information to "get there sooner" after there has been a shift in economic direction from previous periods that wouldn't have been captured in the core method. The trick is to do so transparently - I'm willing to be wrong and more to the point, I'll show you how I got there. Nothing hidden, nothing being altered in an I/B/E/S-type scandal situation. And we'll have the data soon enough to see if I'm on to something. #2, Skeptical is good. For what it’s worth, I have confidence in the modified approach. By itself, the climbing limo method would self-correct as new information (GDP data) is recorded, but may be considerably off target from forecast to actual values until the source data used to make the forecast fully incorporates changes in economic conditions.

The challenge for me is more about how to integrate newer information to “get there sooner” after there has been a shift in economic direction from previous periods that wouldn’t have been captured in the core method.

The trick is to do so transparently - I’m willing to be wrong and more to the point, I’ll show you how I got there. Nothing hidden, nothing being altered in an I/B/E/S-type scandal situation. And we’ll have the data soon enough to see if I’m on to something.

]]> By: TBlumer http://www.bizzyblog.com/2007/03/29/final-4th-quarter-gdp-comes-in-at-____/#comment-112713 TBlumer Fri, 30 Mar 2007 02:01:10 +0000 http://www.bizzyblog.com/2007/03/30/final-4th-quarter-gdp-comes-in-at-____/#comment-112713 #1, color me skeptical. #1, color me skeptical.

]]> By: Ironman http://www.bizzyblog.com/2007/03/29/final-4th-quarter-gdp-comes-in-at-____/#comment-112695 Ironman Thu, 29 Mar 2007 20:07:20 +0000 http://www.bizzyblog.com/2007/03/30/final-4th-quarter-gdp-comes-in-at-____/#comment-112695 Well, it's official - the "Climbing Limo" method for forecasting GDP, which takes data that's 6-12 months old to make its predictions, was off the mark for 2006-Q4 by nearly 1%. I wanted to follow that up here since I had brought the whole thing up back in January when the initial GDP data was released. I may however, have stumbled into an <a href="http://politicalcalculations.blogspot.com/2007/03/improving-climbing-limo-forecasting.html" rel="nofollow">improved technique</a> that uses the most recent GDP data and Climbing Limo forecast values to better hit the target by incorporating more recent information. If the modified-Limo technique works out, we can expect just 2.2% annualized real growth for 2007-Q1. Well, it’s official - the “Climbing Limo” method for forecasting GDP, which takes data that’s 6-12 months old to make its predictions, was off the mark for 2006-Q4 by nearly 1%. I wanted to follow that up here since I had brought the whole thing up back in January when the initial GDP data was released.

I may however, have stumbled into an improved technique that uses the most recent GDP data and Climbing Limo forecast values to better hit the target by incorporating more recent information. If the modified-Limo technique works out, we can expect just 2.2% annualized real growth for 2007-Q1.

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